Bermuda Aviation Services Limited (BAS) chairman Neville Conyers yesterday hailed the financial year ending March 31 as the second best in the company's history despite facing a number of key obstacles.

Due to the company's diverse holdings, Mr. Conyers said BAS was able to withstand considerable setbacks in its aviation business which declined $1.4 million.

Total consolidated revenues jumped two percent, or $0.4 million, to $19.5 million. Earnings from operations climbed 18 percent, or $0.3 million, to $1.9 million. Net earnings climbed $0.2 million, or 11 percent, to $1.7 million.

"The company not only performed well, but performed to our expectations and we are extremely appreciative of the more than 240 dedicated and hard-working people that contributed to this success," said Mr. Conyers. "They again pulled together to deliver these excellent results allowing most of our businesses and divisions to perform to plan and increase our earnings per share by 11 percent to $1.64."

Mr. Conyers said the company enjoyed success in a year where the global aviation industry was thrown into turmoil with higher costs, dwindling passenger loads and the onset of SARS virus and new security regulations and increased competition.

"Each of the carriers serving Bermuda faced real challenges, with some posting unprecedented losses,'' Mr. Conyers said. "Bankruptcy became a real consideration for more than one. Those that managed to post modest profits, although faring better, were by no means less challenged. These factors made for a difficult year putting pressure on our revenues that were further compounded by lower passenger loads and much reduced schedules, particularly in the last six months."

Units of Aircraft Services Bermuda Limited (ASB) were the chief contributors to the profits posted in the aviation division. BAS - which is comprised of a catering kitchen, terminal bar and central services - did not perform as well with revenues falling $1.5 million. Mr. Conyers blamed part of the loss to a $1.6 million decline in revenues for the in-flight catering department. The division, however, did produce an operating profit for the full year.

Weir Enterprises Limited proved to be a solid investment for the company. The major change in the BAS business portfolio contributed significantly to the company's earnings.

Mr. Conyers said all other units performed to plan with Crow Lane Bakery Limited showing a 12 percent increase over the same period a year ago.

"The company continues to gain market share as we focus on both the quality of our product and the service we provide to our clients,'' Mr. Conyers said.

"The bakery saw a small decline in revenues, but control of costs helped to produce the increase in profit.

Management is presently reviewing the operation with a view to making a determination as to whether further investment will realise a commensurate increase in market share and profits."

Supply company D. E. Mortimer also posted improved results. The company introduced new products with sales for the year climbing seven percent, but BAS is considering unloading the business after receiving offers from the original shareholders.

The services of BAS-Serco were once again marketed to the public and private sector. In July, 2002 the company entered into a joint venture with Safeguard Security Services Limited to form a new security company to provide security services at the Bermuda International Airport, but the bid was unsuccessful.

Mr. Conyers said the business climate for some of its companies will continue to be difficult in the near term.

Conflict in the Middle East, SARS and a soft economy in the US "has thrown another layer of cloud on the prospects of meaningful improvement in aviation in general and tourism in particular".